Stock market crashes lead us to believe that
A) factors other than market fundamentals have an effect on asset prices.
B) unexploited profit opportunities never exist.
C) crashes are always predictable when market participants behave rationally.
D) bubbles are a natural outcome of an efficient market.
A
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Since 1975 the distribution of income has:
A. remained virtually constant from year to year. B. become more equal. C. varied considerably from year to year but in general has been stable. D. become less equal.
In the short run, a price increase in the goods and services market measured by the CPI will:
A. increase the purchasing power of money. B. improve producer profits and, thereby, induce suppliers to expand output. C. increase resource prices, lower profits, and lead to a decline in output. D. reduce the natural rate of unemployment.